As we enter the winter months, southern sections of the country should continue to experience some recovery, but the “Snow Bird” states of Arizona, Florida and Nevada will experience limited recovery because the migration from the Northeast will be off.

For the past five years these areas were counting on retirees to acquire a second residence or even move to their communities to retire. Given that 70% of all people remain in the area in which they were born, this planned shift does not correlate to the rapid growth in new construction from these areas.

So until the population grows and home absorption occurs through natural cycles, Florida, Arizona and Nevada will continue to struggle. California has an entirely different set of complex economic issues affecting ownership.

So with that said, the Winter months are traditionally the slowest months. Just like the recent crisis in valuation, one must remember that unless you have to sell, you will not sell. As such, the slowdown in new construction activity is not a surprise. The decline in Median Sales price is not a surprise and the temporary slowdown in the recovery of the real estate markets is not a surprise.

Require lenders to evaluate all borrowers for affordable loan-mods. before initiating foreclosure

Require banks to offer and approve a loan-mod if the restructured mortgage returns more money (net-present value) to investor than would foreclosure

Establish new penalties and would let borrowers overturn foreclosures if lenders fail to comply

Place limits on fees charged in foreclosure

The Mortgage Bankers Association and others have many concerns with the bill, as making modifications mandatory could be problematic for market recovery. What’s important here is that people are coming together, sharing ideas, making plans and devising solutions for this housing crisis. As we move into recovery, it will take the collective thought and desire for resolution to witness a turn in the housing market.

‘The rain’ has many useful features. Members can host a blog, create a group, acquire ‘associations,’ and is great for getting referrals. The more ‘active’ you are on ActiveRain, the most points you acquire, pushing you to the top of pack in your specific area. Most blog post – if directed at a particular local market – could get you to the top of Google searches as well.

But most of all, ActiveRain is a great place to meet great people and share interesting ideas. And it’s FREE. So sign up today and get active!

I found a very interesting article from Time.com dating back to 2005 detailing the frenzy that was theAmerican Housing Market. Reading the article, it’s clear that things were certainly a “party” in every sense of the word compared to today. Although a long read, it’s amazing to see how times have changed since then. It just goes to show that Real estate is certainly cyclical, seasonal and emotional. The now somber, prophetic undertone towards end of the article clearly defines this fact. The signs were there, but most preferred not to take heed;

“This is the $64 billion question of the 21st century’s first boom: Are today’s real estate revelers partying like it’s 1999–just before the stock-market bubble burst? To Edward Leamer, economist and director of the UCLA Anderson Forecast, the housing market, especially in hot coastal areas, is a bubble just as ripe for popping. “We’ve had a more than doubling of housing prices in the past three years here in Southern California, for instance, and there’s no fundamental driving it,” he says. “There isn’t some big crush of people coming to California. That’s ridiculous.”

Instead, say Leamer and other bubbleologists, what’s driving the market is low interest rates, herd psychology, speculation and the expectation of unending price increases. (One study found that Los Angeles homeowners expect their home values to grow 22% every year for a decade.) Meanwhile, promiscuous lenders are throwing money at buyers like beads during Mardi Gras. “Anybody who can crawl in off the street can get a loan with 0% down at three or four times their income,” Leamer says.”

On track to cost the government $15 Billion, the $8,000 Tax-Credit implemented last winter has undeniably stimulated the housing industry. Now, with the November 30th deadline looming, questions on whether the housing market can survive without it are surfacing.

With Real Estate being Cyclical, Seasonal and Emotional, the cyclical Tax-Credit boosted seasonal sales, causing an emotional stir in the market. The plea, led by the NAR, is looking to extend the credit through next summer, expanding it to $15,000 and making it available for all buyers. If extended, the damage would amount to between $50 billion and $100 billion.

As mentioned in our Manhattan Condo article, we see signs of recovery in the market. An extension on the tax-credit would only ensure this fact. Due to the exclusivity, many homeowners looking to trade-up were unable to benefit. An allowance of the credit to all buyers would leverage the declining larger homes market, as the current credit has first-time buyers looking more towards mid-level and starter homes. While declines are epxceted during the winter seasons, an extension of the credit could curtail this fact. Also, more construction creates employment and consumer spending is helped with furniture and home fixture needs.

But this summers’ housing numbers were certainly dependent on the credit, causing an emotional high that, all things considered, is artificial. While no one would like to see any declining numbers in the housing industry, we must not forget about the factors that created the recent housing bubble along with its subsequent burst. As stated in the Housing in Crisis Report, overbuilding in specific areas and easy lending manufactured a bubble without the proper demand and financial security of homeowners to sustain it. At the end of 2008, property data from public records indicated an excess of 5 million homes on the market, a number that needs to be corrected severely. An increase to $15,000, with mortgage rates now under 5% could possibly lure buyers otherwise unable to afford a new home with mortgages they can’t afford. Overbuilding would likely continue, and the steps to propping up another bubble would be in place. Also, could taxpayers afford to lose another $100 billion?

What do you think should happen? Whether there is an extension or not, the government cannot provide the credit forever; it will have to end eventually. The question is, what will happen after that?